Free advice, no advice or paid advice?

What’s it referred to as? What is it? Pros Cons
Free advice (Visiting Pension Wise) Government service, which outlines the new rules and provides general information with the objective of helping you decide your next steps.

After this you have to either get paid advice from a professional adviser or go down the no advice route.

Its free and will give you the basics.

If you understand the detailed implications of tax planning and legislation and are comfortable with long term financial planning and benefits laws without assistance then this could be for you.

It doesn’t look at your circumstances; you still have to make your own choices which many find daunting.

You are open to mistakes that could lose you up to 45% in tax & possible loss of benefits. (Usually 25% is tax free and the balance is charged at your marginal rate and subject to future changes.)

No Advice – Getting the money directly from your pension provider You do it yourself, based on general research and information from your pension provider, who are obliged to make sure you are aware of the risks and loss of guarantees if applicable. If your pension scheme provider allows you to do this, and many won’t, but if they do then there is no adviser fee, however, there could still be exit charges. You can make decisions that could result in you losing a significant amount in tax or loss of some state benefits.

Your pension provider may not allow you to do this or only allow withdrawal of the whole fund. You may not need all of it and you could incur tax bills unnecessarily.

Paid advice A detailed evaluation of your personal circumstances covering income, benefits, tax, debts, outgoings and other commitments either face to face or over the phone.

They will also help you plan your retirement income to ensure you have enough left in retirement.

As well as the planning and advice they also carry out the work making sure there are no mistakes. If you do choose to take paid advice then make sure they are FCA regulated and specialise in the pensions field.

Many financial advisers do not have the specialist knowledge you’d require of them.

Detailed advice is the only way to ensure that you are 100% informed on your next steps.

Using a specialist firm will ensure that there are no nasty tax or benefit surprises.

They will take all of your personal circumstances into consideration and advise you of other options that you may have.

If pension release is the best option for you, they will help you limit the tax you will pay and inform you how to minimise the loss of state benefits.

They will also help you understand what you’ll need when you retire.

There is a cost to this.

However, in a significant number of cases this advice will save you money in the long run.

If you pick the right adviser then the advice is free up until you decide to appoint them to carry out the withdrawal.